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1、How brand advocates boost reputation,drive sales,and increase brand loyaltyCustomer referral marketing in Singapore:A consumer perspective203 Introduction04 Methodology05 Key insights06 Todays consumers crave community08 Shoppers trust their communitys opinions10 Tapping into the know,like,and trust

2、 factor14 Who should receive rewards in a referral programme?17Whichindustriesarebenefitingfromreferralprogrammes?22 Driving loyalty with rewards consumers like24 Incentivising customers to refer your brand31 Designing programmes that consumers want to participate inContentsDespite brands spending 2

3、22%more on advertising than they did a decade ago.In Singapore,digital ad spend is forecasted to increase by almost 750 million dollars(almost 50%increase)between 2023 and 2028.Despite the massive ad investment,todays oversaturation of traditional ads and too-good-to-be-true value propositions has m

4、ade shoppers sceptical and more discerning.Meanwhile,hyper fatigue inspires consumers to reprioritise the community and take a more“old-school”approach to shopping:asking friends and family for their recommendations.With so many product choices,shoppers want a voice they trust to guide them.Thats wh

5、y more than 4 in 5 consumers say recommendations are important to their buying decisions.This new reality allows brands to reach a wider audience without advertisement overspending.Many brands already have customers who recommend their products;rewarding those loyal customers can quickly turn them f

6、rom casual endorsers to revenue-driving brand advocates.Referral marketing allows brands to acknowledge customer loyalty,expand their reach,and show customers appreciation.The Customer referral marketing in Singapore:A consumer perspective reveals new research on how brands can turn word-of-mouth ma

7、rketing into a scalable growth channel.Introduction34|MethodologyMethodologyThe team set out to discover when and how often consumers rely on referrals and recommendations when shopping for new products.We surveyed 505 online shoppers older than 18 across Singapore to learn how they view recommendat

8、ions from family,friends,and other people they know.We also looked at how shoppers learn about new brands through conversations and how they participate in customer referral programmes.Our survey population income groups were:Below$1,0003%$1,000-$4,99921%$5,000-$7,99922%$8,000-$12,99926%$13,000-$14,

9、99910%$15,000-$19,9999%$20,000+6%Prefer not to answer2%SingaporeOur survey population income groups were:Total monthly household income5|Key insightsKey insightsRecommendations are very important to consumers 83%of consumers said recommendations and reviews are important in their purchase decisions.

10、When looking for product information,consumers trust someone they know the most,but trust in online reviews continues to grow,highlighting the value of customer reviews.Recommendations give consumers specific details that only users of the product know.This feedback gives consumers confidence in dec

11、ision-making and provides insights on whether the product would satisfy their needsconsumers want to hear from genuine users of the brand instead of from the brand itself.Word-of-mouth marketing carries weight Over 4 in 5 consumers learn about new brands during conversations.Over half of consumers s

12、aid negative feedback from someone they know led them to choose an alternative brandshowing the power of word of mouth.Participation in official referral programmes has room to grow 55%of consumers participate in consumer referral programmes and most do so to earn incentives or rewards.45%of consume

13、rs dont participate in referral programmesmost fear theyll annoy their friends by constantly sending referral links.Interestingly,51%of consumers who dont participate in referral programmes have never received a referral code or link from someone they know.This shows potential for growing and increa

14、sing participation through education and awareness.3216|Todays consumers crave communityTodays consumers crave communityAs traditional advertising becomes more expensive,it might not be the most cost-effective use of marketing budgets.Over a third of Singapore shoppers(38%)say traditional ads dont p

15、lay an important role in buying decisions when buying a product for the first time.Only 4%of shoppers see ads as the most trusted source of information when making a purchase decision.This change drives brands to explore new ways to offset large traditional advertising budgets through more community

16、-centric channels,like referral marketing.Which of the following sources do you trust the most for infomation when making a purchase decision?Someone I know personally,such as a friend or colleague53%Online customer reviews28%Indirectly from someone through social media,forums,etc.,for example,askin

17、g for a recommendation on a neighbourhood Facebook group11%Influencers I follow3%Advertising channels such as TV,Radio,newspaper,billboards,etc.4%7|Todays consumers crave communityWhile todays barrage of ads may inform customers of new products,its also made them more discerning.As customers redefin

18、e what value means to them,theyre searching for more authenticity.Many customers focus on building relationships and communityboth in-person and onlineand seek out referrals and reviews from these communities to find trustworthy opinions on new products.Now that 83%of shoppers learn about new produc

19、ts in conversation,at least some of the time,brands need to focus as much on delighting customers as they do on building awareness.This is especially true for young Millennials(ages 28-35)96%discover products through conversation.After all,not many shoppers are willing to recommend a product they do

20、nt love.83%of shopperslearn about new products in conversation.8 Shoppers trust their communitys opinionsShopping has historically been a social activity,and todays consumers have made buying online as social as a visit to the mall.Online recommendations are like the friend outside your dressing roo

21、m,confirming youre making the right choice.According to 53%of customers,people they know are the most trusted source of information when making a purchase.Additionally,54%of shoppers will forgo a purchase if someone they know reports a negative experience with the brand.How has your trust in the fol

22、lowing sources for referrals and recommendations changed in the past year?IncreasedIt stayed the sameDecreasedPeople I know personally,such as family,friends,colleagues,etc.63%4%Online customer reviews52%8%Advertising channels such as TV,radio,newspaper,billboards,etc.61%14%*May not total due to rou

23、nding and respondents indicating“Im not sure”31%38%17%9|Shoppers trust their communitys opinionsIn 2024,consumers increasingly turn to personal recommendations and customer reviews before purchasing.Nearly a third of shoppers say theyre more likely to buy something recommended by someone they know c

24、ompared to last year.Additionally,38%of customers are more likely to buy something based on an online review than they were in 2023.Like a personalised recommendation,online reviews offer the insight that product descriptions cant provide and that shoppers want before they commit to a product.Both s

25、ources offer customers newfound access to a community,giving them more confidence and validation that a product suits them.10|Tapping into the know,like,and trust factorTapping into the know,like,and trust factorTrust is crucial in recommendations.Consumers need to trust a brand before recommending

26、it,and their friends must trust their opinions to make a purchase.Interestingly,83%of consumers consider peer recommendations important to their decision-making process.While every generation reports valuing recommendations from friends and family,31%of consumers claim they trust those recommendatio

27、ns more this year than last year.For example,94%of Gen Zers(ages 18-27)and young millennials(ages 28-35)make purchase decisions based on referrals from someone they know.Meanwhile,56%of consumers over the age of 44 report valuing referrals because they offer inside information that only someone who

28、has used the product would know,reducing the likelihood that theyll be unsatisfied with what they buy.11|Tapping into the know,like,and trust factor63%48%49%The importance of referrals and recommendations in the consumer purchase decision according to age groupIt answers questions that product descr

29、iptions might not cover.31%35%38%49%39%18-27Gen Z28-35 Millennials36-43Millennials44-59Gen X60 and olderBoomersIt decreases the risk of buying a product and not being satisfied.47%52%66%57%It gives me confidence in my purchase.49%41%58%49%42%It offers insight into whether the product or service will

30、 satisfy my needs.59%68%71%It provides specific details only someone who has used the product would know.60%56%59%68%56%*Multiple answers possible12|Tapping into the know,like,and trust factorRecommendations play an essential role in the shopping process,validating the information seen in ads.Now th

31、at consumers are accustomed to seeing ads constantly,their relationship with advertising is evolving.While shoppers may still discover new products from ads,they increasingly trust the voices of real customers over a companys marketing message.Even when an ad piques a shoppers interest,it often isnt

32、 enough to drive a sales conversion.Instead,brands may want to redirect some budget to generating social proof supporting their advertising claims.Recommendations and reviews complement advertising by giving brands unique access to the know,like,and trust(KLT)factorthe belief that consumers are more

33、 likely to buy from someone they already know,like,and trust,like a friend or favourite influencer.A recommendation and customer review fill in gaps and give buyers a first-hand experience from a trusted source.13|Tapping into the know,like,and trust factorLeveraging the KLT factor makes brands appe

34、ar more trustworthy and gives consumers more confidence that theyre making the right choice.This added confidence is especially valuable for younger shoppers with tighter budgets.Receiving a recommendation from someone they know,like,and trust simplifies their decision-making process so they can spe

35、nd wisely and satisfy their needs.Brands can use the KLT factor to their advantage by shifting investment to more community-oriented marketing methodslike referral marketing or review collecting.This makes sharing about your brand more compelling.Alongside great customer service,these channels encou

36、rage shoppers to continue speaking positively about your brand.14|Who should receive rewards in a referral programme?Who should receive rewards in a referral programme?Savvy online shoppers frequently search for a deal,and customer referral programmes offer brands a unique opportunity to encourage c

37、urrent happy customers to refer their friends in exchange for rewards.Will Fraser,General Manager of interviewed Keith PosehnCEO of growth consulting agency Zorz.Keith said referral programmes are“a lever to drive a change in value between your customer and their friend.”That increase in perceived v

38、alue drives over 80%of people who have received a referral code or link,use it at least some of the time,of which 34%report theyll often or always use a referral code when its available.15|Who should receive rewards in a referral programme?45%of peopledont participate in referral programmesStill,sen

39、ding out referral codes is far from mainstream in Singapore.Many consumers(45%)still dont participate in formal referral programmes,of which 10%have never heard of one.Without awareness of how referral programmes work,its not surprising that 51%of those shoppers havent knowingly received a referral

40、code or link.Nearly half(47%)of shoppers who dont participate in referral programmes are concerned theyll annoy family and friends by sharing referral links,especially if they believe theyre the only ones benefiting from a referral.Almost a third(32%)of shoppers feel uncomfortable recommending a pro

41、duct only to receive a reward.Meanwhile,68%of referrers report they prefer when they,and the person theyre referring,both receive a rewardand offering mutual rewards can alleviate shoppers initial concerns and boost referral participation.Consumers that participate in referral programmesConsumers th

42、at dont participate in referral programmesOf the 55%of consumers participating in referral programmes,46%have made 2 to 3 successful referrals,while over a fourth(27%)has successfully referred someone 4 to 5 times.This research reveals that referral programmes are still a blue ocean for brands willi

43、ng to educate their shoppers.16Consumer participation in referral programmes by age group18-27Gen Z28-43 Millennials37%44-59 Gen X 60&older Boomers72%28%63%45%55%41%59%17|Which industries are benefiting from referral programmes?Which industries are benefiting from referral programmes?While brands in

44、 any industry can start a referral programme,some products and services offer a greater opportunity than others to leverage this effective marketing channel.For instance,over 40%of people rely on referrals and recommendations before buying health and beauty products,travel products and services,elec

45、tronics,or professional services.However,only 28%of consumers have referred in-person professional services through an official referral programme.This may be because these professionals dont frequently offer reward programmes or customers may not use them for frequent repeat purchases.In contrast,m

46、any people may extend offers for financial services to their friends because those referral programmes offer appealing rewards.18|Which industries are benefiting from referral programmes?What products do you mostly rely on referrals or recommendations for?Financial services,such as credit cards,insu

47、rance,banking,and investment platforms.37%Pet supplies8%Mobile plan25%Electronics41%Specialty products such as designer clothing,sports cars,professional cameras,etc.17%Sports and outdoor13%Automotive,such as cars and accessories15%Other1%Health and beauty products45%Professional and in-person servi

48、ces such as plumbers,haircare,car repair workshops,legal services,etc.41%Clothing and apparel31%Home and kitchen products29%Software and digital services such as productivity tools,apps,streaming services,online courses,etc.29%Subscription-based businesses,such as meal kits,book clubs,beauty boxes,e

49、tc.17%Travel,for example,airfare,car rentals,accommodation44%*Multiple answers possible19|Which industries are benefiting from referral programmes?Besides financial services,most shoppers refer travel products and services,health and beauty products,or software and digital services to their friends.

50、Referral programmes may be more common among brands within these categories,and they may promote their referral programmes more openly than companies with a recurring financial commitment like a subscription-based business or mobile plan.20|Which industries are benefiting from referral programmes?Wh

51、at type of products have you referred to others using referral or refer-a-friend programmes?Clothing and apparel24%Financial services,such as credit cards,insurance,banking,and investment platforms.43%Specialty products such as designer clothing,sports cars,professional cameras,etc.18%Automotive,suc

52、h as cars and accessories14%Health and beauty products36%Subscription-based businesses,such as meal kits,book clubs,beauty boxes,etc.20%Other1%Sports and outdoor11%Pet supplies7%Home and kitchen products21%Mobile plan24%Electronics25%Software and digital services such as productivity tools,apps,stre

53、aming services,online courses,etc.31%Travel,for example,airfare,car rentals,accommodation38%Professional and in-person services such as plumbers,haircare,car repair workshops,legal services,etc.28%*Multiple answers possible21|Which industries are benefiting from referral programmes?As consumers lean

54、 more on people they know to make purchase decisions,brands across all categories and price points can benefit from introducing or refining their referral programme.Sometimes,the referral programme may only need more dedicated resources to become more visible.“I find often companies,even surprisingl

55、y large companies,have referral marketing as a box to be ticked.It often ends up where its under-resourced,its not prioritized,and its not a part of the key growth strategy often to the companys detriment And yet,its also been a massive driver of growth for companies in a number of other places.Some

56、 of the biggest,most explosive growth companies weve ever seen had referral programs that made up a very substantial portion of their total growthwhich,were talking 10 to 20%+of the total pie,which is absolutely massivebecause they understood that it was foundational to the growth of the company.”-K

57、eith Posehn,Advocacy Channel podcast guest and CEO of Zorz22|Driving loyalty with rewards consumers likeDriving loyalty through rewards consumers likeProduct quality is the main consideration in determining whether a referrer will remain loyal to a brand after recommending a product.For instance,if

58、a referrer recommends a poor-quality product to a friend,it could affect their reputation and make both parties think twice before purchasing again from that brand.Conversely,if the friend has a great product experience,the referrer will likely stick with the brand long-term.What factors could influ

59、ence your loyalty toward a brand after referring someone through its referral or refer-a-friend program?Quality of the product or service.55%Pricing of the products in comparison to competitor brands.49%The consistency of the brand experience.46%The experience the person I referred had with the bran

60、d.40%Experience with the referral programme processes.33%Brand transparency.30%Recognition of loyalty,for example,whether loyal customers are rewarded.46%*Multiple answers possible23|Driving loyalty with rewards consumers likeOver half of customers report rewards and recognition for supporting a bra

61、nd contributes to them becoming brand loyal.56%of customers report their loyalty increased after making a referralwith or without a reward.This means brands have a huge opportunity to impact how loyal customers remain to the brand.Recognition is a powerful method to drive heightened loyalty.Once a c

62、ustomer is willing to recommend your brand,46%claim their loyalty can be influenced by recognition through rewards.44%56%of consumers brand loyaltystays the same,whilesay their loyalty increases.After referring,24|Incentivising customers to refer your brandIncentivising customers to refer your brand

63、Strong incentives can motivate consumers to overcome any discomfort in promoting your brand.Crafting these incentives begins by understanding what your customers value.Directly asking or surveying customers is a great way to learn what rewards are valuable to them and what they perceive as valuable

64、about your product.From there,brands can create rewards that make customers feel appreciated and encourage them to become even more eager advocates.Offering a reward exchange is a simple solution that allows customers to select their rewards from a list of options upon completing a successful referr

65、al.25|Incentivising customers to refer your brandRewards and incentives that motivate consumers to refer a product or service.Cash54%Free products/services40%Custom rewards-the option to choose a reward from a list39%Gift card through a third-party such as Visa or Mastercard30%Points32%Store credit2

66、1%Store or brand-specific gift card17%Subscription time8%*Multiple answers possibleFor many,instant gratification plays a major role in perceiving a reward as valuable.Most consumers(54%)report wanting to receive cash or free products or services for their referrals,while others prefer a percent dis

67、count off their next order.But positioned correctly,perceived value in the form of access to more capabilities or limited edition products may be more valuable than these rewards.“Marketers biggest mistake in referral marketing is not speaking to their customers.Engaging with customers in a meaningf

68、ul way will give you greater insight into what rewards would entice them.”-Will Fraser,General Manager of Percent discount43%Internal currency,such as access to new product features or free product upgrades17%26|Incentivising customers to refer your brandReward design is not one-size-fits-all.The mo

69、st valuable reward for your company depends largely on the type of products you offer and the average price point.The brand should also consider its margins and what would make sense for them.For instance,a mattress store may only sell a mattress every ten years to one customer,but they could offer

70、the referrer an exclusive pillow while their friend receives a discount code for their new mattress.The referrers reward complements the item theyve already bought and provides value that aligns with the same goal as their original purchase.Customers have opinions about what rewards they prefer,but

71、it doesnt always make sense for a brand to offer cash or a gift card.For example,PXAs course:Referral Revolution:Discover the Power of Referral Programmes for Business Success discusses the Rule of 100a percentage discount appears larger than a dollar-amount discount for items costing less than$100.

72、In contrast,a dollar-amount discount appears larger for items over$100.This reveals that theres no hard-and-fast rule on defining value in a referral programmes.Check out Referral Revolution:Discover the Power of Referral Programmes for Business SuccessImplement and execute a successful referral pro

73、grammes strategy.Go to course27|Incentivising customers to refer your brandFor instance,a company with lower profit margins may want to consider offering a percentage discount instead of a cash discount if the percentage is smaller.Although a percentage discount may be less than a cash discount,cons

74、umers might perceive the percentage discount as being more valuable if the product is under$100 as explained by the Rule of 100.Still,s 2024 State of Referral Marketing report revealed that brands frequently offer rewards that fall short of customer expectations.Most commonly,brands offer store cred

75、it,percentage discounts,and gift cards.Shoppers say a percentage discount would need to be at least 11%to 20%off to make referring worthwhile,aligning with what most brands already provide.When deciding on reward type,its important to keep your business model,product type,and company margins in mind

76、.Consumers expect reward values between$21-$4028|Incentivising customers to refer your brandWhat is the minimum amount of cash,gift card,or store credit that would motivate you to participate in a referral programme?What minimum discount percentage would motivate you to participate in a referral pro

77、gramme?1%-10%14%11%-20%37%21%-30%28%31%-40%9%More than 50%5%$1-$20$21-$40$41-$60Morethan$6041%-50%5%*May not total 100%due to rounding29|Incentivising customers to refer your brandAlongside more compelling rewards,consumers want better-designed programmes.The majority of shoppers report that a flat

78、rewards structure and referral tracking dashboard would encourage them to participate more in referral programmes.Meanwhile,over a third(39%)of shoppers prefer a structure where rewards increase with every referral.A rewards exchangewhere consumers can trade accrued points for a reward of their choi

79、cecan also incentivise shoppers to collect more points by referring more friends.of shopperssay a referral tracking dashboard is an important feature in a referral programme58%What kind of reward structure do you prefer?*May not total 100%due to roundingWhen I receive a flat reward for every referra

80、l,for example,$10 for each referral.56%When the value of the reward increases with each referral I make.39%I dont have a preference.5%30|Incentivising customers to refer your brand“The referring person also wants to know the status of their referralsa dashboard makes this a breeze.Knowing the status

81、 of referrals gives customers confidence in the programme and reduces support tickets.“-Will Fraser,General Manager of Yet,these features hold value solely when the programs technical elements are finely tuned.For shoppers,59%report the importance of the referral programme and their unique share lin

82、ks being easy to accessparticularly on a mobile devicewithout needing an additional or third-party log-inAdditionally,79%of consumers want assurance that their and their friends data is secure,saying its a very or extremely important feature of a referral programme.These features are critical for co

83、nsumers to participate in your programme.Adding data management parameters to a referral programor adopting a platform that is already compliant with privacy laws like Europes General Data Protection Regulation(GDPR)and the Singapore Personal Data Protection Act,reduces the amount of personally iden

84、tifiable information your organisation receives,giving referrers more peace of mind.The availability to share referral links and codes directly from the referral app or website is limited,for example,sharing links and codes via social media,email,WhatsApp,etc.39%31|Designing programmes consumers wan

85、t to participate inDesigning programmes consumers want to participate inDespite 44%of consumers sending their friends referral links at least a few times yearly,many still experience frustrations when participating in these programmes.The most common complaint about referral programmes is the limite

86、d availability to share codes and links directly from the referral app or website.This frustration heightens when 36%of participants report that reward values arent high enough to justify the effort to refer.These bottlenecks prevent shoppers from being more active advocates for your brand.What frus

87、trations do you experience when participating in referral or refer-a-friend programmes?I have a hard time finding referral programs32%I dont know how to track the status of my referrals26%Its too time-consuming24%Its difficult to use14%I feel disingenuous and uncomfortable recommending a product to

88、receive a reward in return.18%The rewards are not worth it as the value is not high enough36%*Multiple answers possible32|Designing programmes consumers want to participate inNearly a third of people report not knowing where to find referral programmes they can participate in.That means brands need

89、to showcase their programmes and make shoppers aware of the awards they can access by sharing with their friends.Expanding programme visibility,prioritising programme accessibility and ease of use,and empowering advocates with educational content about your referral programme are powerful steps to m

90、ake referral programmes more successful.For many peopleparticularly the 20%who rarely or never use a referral link or code that theyve receiveda better understanding of how referral programmes work may push them outside their comfort zone so they can confidently share their experiences with your bra

91、nd.Use social media posts,how-to articles,and dedicated newsletters to explain your programme simply and set up referrers for success.“Put a referral programme front and center across various customer touchpoints.Get it onto your website,apps,and regular email marketing.Create a plan to make it acce

92、ssible and include a combination of evergreen and one-off campaigns to promote the referral programme.”-Will Fraser,General Manager of 33|Designing programmes consumers want to participate inWhile education can help consumers feel more comfortable sharing your brand,it cant compensate for poor progr

93、amme design,a bad user interface,or underwhelming rewards.Consumers need a strong incentive to risk discomfort and share your brand with others.Developing those incentives starts with asking your customers what they care about.Follow this checklist to create a referral programme consumers want to pa

94、rticipate in.Instant access to rewards for the people referring and the people receiving the referralAccessible and reliable referral links with pre-written,sharable contentEasy-to-use mobile experienceA user-friendly dashboard to track the status of referralsEducational content showing referrers ho

95、w to be successful in the programme and how the programme works before joiningRewards exchange to let consumers choose reward typesGDPR,Singapore Personal Data Protection Act,and other regional privacy lawsMust-have features in a referral programme:A leaderboard offer to encourage more programme par

96、ticipation34| makes creating a referral programme simpleTurning customers into loyal advocates doesnt have to be complicated.With can create highly engaging,easy and fun referral makes creating,managing,and scaling customer referral programmes simple.Our solution offers your customers the peace of mind they need to feel confident promoting your brand,including solid data privacy controls and intuitive user experiences.Discover how to build a scalable and profitable customer referral programme with makes creating a referral programme simple